-
-
Re: New "Twin Euro" system
Breaking up the euro in that way would be suicide for France in particular - that 500 billion of Spanish debt denominated in "bad euros" could wipe out the capital base of the French banking system when the "bad euro" drops against the "good euro". Politically France and Germany can't bail out Spain directly, and they probably can't get away with openly bailing out their own banks again.
I suspect that the ECB will just buy up newly-issued sovereign debt to hold down costs for Spain, etc. for as long as they can - after all, the Fed got away with buying 100% of the US mortgage debt issued last year, so what harm could a few hundred billion of sovereign debt do to a central bank? And if the euro falls, all the better for export growth. Monetization seems like the only politically acceptable way to kick the can down the road for a while... -
Re: New "Twin Euro" system
Well somebody bought that "successful" Spanish bond auction last week...and I have serious doubts it was private investors...Originally posted by mmreilly View PostComment
-
Re: New "Twin Euro" system
Would this not mean that the bad euro could have a higher interest rate? and thus make the bad euro stronger? albeit at great cost to those left in the bad euro counties.Originally posted by mmreilly View Post
Plus it's only paper money and the French banks never really wanted to be paid off anyway, they never expected it, all they want is a constant stream of interest payments and if this extends the stream of payments way out into the future all the better.Comment
-
Re: New "Twin Euro" system
I view it as a sign as to just how bad the Euro situation is that this is even being discussed.
The "bad euro" nations may be about to get thrown under the bus. And this does nothing to resolve the underlying issues regarding the Euro structure. If a "strong Euro" nation gets into trouble, will they split it again into "the good, bad, ugly" Eurozones?Comment
-
Re: New "Twin Euro" system
Wow, mega, thank you for these news!Originally posted by Mega View Post
I suspected that somehow Europe would have to prepare for the next big hit. Bailing out Greece was just to buy time before some drastic measures are taken. Also, just recently Marc Faber said that bailing out Greece was not done for Greece. And I agree.
I believe that this is one alternative path to going back to countries own currencies by narrowing the size of the Euro club's circle.
Can anyone share their ideas about how the super Euro can be implemented? Would it be territorial (i.e. if you have bank account in one of the super Euro countries funds would automatically convert), or some other method? Could these news set a panic into gold, dollar, or into opening bank accounts in the super euro countries?Comment
-
Re: New "Twin Euro" system
faber reading itulip?Originally posted by deflateIT View Post
http://www.itulip.com/forums/showthr...532#post164532We can obviously see the wheels come off this European Greek rescue package. I mean in the final analysis the EU/ECB/IMF rescue package for Greece is really a bailout for the banks and the countries that lent to Greece. It has nothing to do with Greece per se. We could see a debtor boycott where debtors say simply, “I’m not paying. I’m walking away from this.” It wouldn’t take much! Because we’re working in the world of fractional reserve banking and leveraged corporate balance sheets, if you get just a couple of small events is all it takes to set a major global crisis in motion.
impossible. from same article...Originally posted by deflateIT
EJ: Getting back to Europe, there has been some speculation that one or more European countries might choose split back off from the euro zone and reestablish national currencies. You were involved in the transition to the euro back in the late 1990s. Do you agree with my thought that it would be very difficult operationally to revert all their systems, everything from to electronic data interchange to the banking systems, to handle exchange rates? Would that be operationally very hard to pull off?
AJ: It’s a huge undertaking. You’ve got everything from deposit agreements to financial contracts between companies. You’ve got the question of central bank operations. It would be an enormous undertaking for any economy to go back down the track to establishing its own currency. That is not to say it couldn’t be done but it is fraught with operational risks, high costs and doubts, I think, about the ultimate probability of success over whatever time frame. Remember the run up to the EMU it took financial institutions four to five years and enormous amounts of money to complete that exercise to move from national currencies to the euro. When I say enormous amounts of money I mean hundreds of millions of dollars per institution, if it’s a large institution.nonsense speculation with no basis.Originally posted by deflateIT
ej says gold is recipient of 'flight capital' from the euro. when you see faber using that phrase you'll know the source.Originally posted by deflateIT
Comment
For a concise, readable summary of iTulip concepts developed over the past 16 years and a vision of a challenging next decade and how to navigate it, read Eric Janszen's book "Post Catastrophe Economy".
Join the discussion of today's events with a wide range of professionals with an interest in economics and finance. Register to join our 50,000 plus member registered community from 78 countries today.
Subscribe to iTulip Select for access to the longest running, deep, accurate, and unvarnished macro economic trends analysis and forecasting available, since 1998.
- If this is your first visit, be sure to check out the FAQ by clicking the link above. You may have to register before you can post: click the register link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below.
Working...
Tweet
Comment